Transcript Marketing Chapter 1 Lecture Presentation (8-31-10)

Marketing
Creating and Capturing Customer Value
Bluefield College
August 31, 2010
What Is Marketing?
Simple definition:
Marketing is managing profitable customer relationships.
Goals:
1.
2.
Attract new customers by promising superior value.
Keep and grow current customers by delivering satisfaction.
Comprehensive definition
Marketing is the process by which companies create value for
customers and build strong customer relationships in order to
capture value from customers in return.
OLD view of marketing:
NEW view of marketing:
Making a sale—“telling and
selling”
Satisfying
customer needs
A Simple Model
of the Marketing Process
Core Marketing Concepts
 Marketers must understand five core
customer and marketplace concepts:
– Needs, wants, and demands.
– Market offerings.
– Value and satisfaction.
– Exchanges and relationships.
– Markets.
Needs, Wants, and Demands
 Need:
State of felt deprivation including physical, social, and
individual needs.
• Physical needs: Food, clothing, shelter, safety.
• Social needs: Belonging, affection.
• Individual needs: Learning, knowledge,
self-expression.
 Wants:
Form that a human need takes, as shaped by culture and
individual personality.
 Wants + Buying Power = Demand.
Market Offerings
Some combination of products, services,
information, or experiences offered to a market
to satisfy a need or want.
Marketing offers fulfill needs and wants
Market offerings are not
limited to physical products,
and things aren’t always
what they seem to be.
UNCF powerfully markets
the idea that “A mind is a
terrible thing to waste.”
Customer Value and Satisfaction
 Care must be taken when setting
expectations for market offerings:
– If performance is lower than
expectations, satisfaction is low.
– If performance is higher than
expectations, satisfaction is high.
 Advertising sets expectations, and
marketers must be careful not to
promise too much.
Exchanges and Relationships
 Exchange:
– Act of obtaining a desired object from
someone by offering something in return.
 Relationships:
– Marketing actions build and maintain
relationships with target audiences
involving an idea, product, service, or other
object.
– Marketers build strong relationships by
consistently delivering superior customer
value.
What Is a Market?
 A market:
– Is the set of actual and potential buyers of a
product.
• These people share a need or want that can be
satisfied through exchange relationships.
Marketing Management
 The art and science of choosing target markets
and building profitable relationships with them.
– Aim is to find, attract, keep, and grow customers by
creating, delivering, and communicating superior
value.
– Designing a winning marketing strategy requires
answers to the following questions:
1. What customers will we serve?
— What is our target market?
2. How can we best serve these customers?
— What is our value proposition?
Selecting Customers to Serve
 Selecting Customers to Serve
– Market segmentation:
• Dividing the market into segments of customers.
– Target marketing:
• Selecting one or more segments to cultivate.
 Choosing a Value Proposition:
– The set of benefits or values a company
promises to deliver to consumers to satisfy
their needs.
• Value propositions dictate how firms will
differentiate and position their brands in the
marketplace.
Marketing Management Orientations
 Organizations design and carry out
their marketing strategies under five
alternate concepts:
– Production Concept.
– Product Concept.
– Selling Concept.
– Marketing Concept.
– Societal Marketing Concept.
The Selling and Marketing Concepts
 The marketing concept:
– A marketing management philosophy that holds that
achieving organizational goals depends on knowing
the needs and wants of target markets and delivering
the desired satisfaction better than competitors.
Considerations Underlying the
Societal Marketing Concept
The Societal Marketing Concept
 The societal marketing concept:
– A company’s marketing decisions should consider
consumer’s wants, the company’s desires, consumers’
long-run interests and society’s long-run interests.
Johnson & Johnson’s
credo stresses putting
people before
profits—the societal
marketing concept in
action.
The Body Shop is another
example of firm which
practices the societal
marketing concept.
The Integrated Marketing Plan
 Transforms the marketing strategy
into action.
 Includes the marketing mix and 4 Ps of
marketing:
– Product.
– Price.
– Place (Distribution).
– Promotion.
Customer Relationship
Management
The overall process of building and maintaining
profitable customer relationships by delivering
superior customer value and satisfaction.
 Customer relationship management (CRM):
– Deals with all aspects of acquiring, keeping,
and growing customers.
– Customer value and satisfaction are key.
Customer Perceived Value
Customer’s evaluation of the difference
between all of the benefits and all of the costs
of a marketing offer relative to those of
competing offers.
 Customer perceived value:
– Perceptions may be subjective.
– To some customers “value” might mean
paying more to get more.
Customer Satisfaction
Extent to which the product’s perceived
performance matches a buyer’s expectations.
– High levels of customer satisfaction
often leads to consumer loyalty.
– Some firms seek to DELIGHT
customers by exceeding
expectations.
– Profitability must be considered.
Changing Nature of
Relationships
 Firms may choose to build relationships at different levels.
 Loyalty and retention programs build relationships and may include:
– Frequency marketing programs.
– Club marketing programs.
 Customer profitability analysis eliminates losing customers and
selects profitable ones with whom relationships should be
developed.
 Firms now relate more deeply and interactively via blogs, social
network Web sites, email, and video sharing.
 Embracing customer-managed relationships requires marketing via
attraction rather than intrusion.
 Consumer-generated marketing has become a significant marketing
force.
– Doritos fan-generated commercial
Marketing in Action
H.J. Heinz attempted to harness consumergenerated marketing and received 8,000
entries in a homemade ad contest for its
ketchup brand on YouTube.
Capturing Value From Customers
 Value is captured from customers via current and future
sales, market share and profit.
– Superior customer value leads to highly satisfied loyal customers
who buy more.
– Key outcomes of customer value include customer loyalty,
retention, share of market, share of customer, & customer equity.
 Customer lifetime value
– The value of the entire stream of purchases that the customer
would make over a lifetime of patronage.
 Share of customer
– The portion of the customer’s purchasing that a company gets in
their product categories.
 Customer Equity
– The total combined customer lifetime values of all the company’s
current and potential customers.
Customer Relationship Groups
An Expanded Model of the
Marketing Process